Kenvue misses quarterly sales estimates on sluggish skincare sales

(Reuters) – Kenvue (NYSE:) reported third-quarter sales marginally below Wall Street estimates on Thursday, hurt by weakness in its skin health and beauty unit housing the Neutrogena and Aveeno brands, amid pressure from activist hedge fund Starboard Value.

The consumer products company has faced criticism from investors for lackluster growth in its skincare and beauty brands.

After Starboard built a sizable stake in the consumer products company, the activist hedge fund said there was an opportunity to improve revenue growth and margins for Kenvue’s beauty brands.

Kenvue is focusing on improving sales through increased marketing spend and in-store presence of its skincare products including brands such as Clean & Clear. Yet, sales in the segment fell 4.2% to $1.07 billion in the third quarter ended Sept. 29.

Analysts were expecting segment sales of $1.10 billion for the reported quarter, according to data compiled by LSEG.

Total (EPA:) revenue fell slightly, to $3.90 billion, below analysts’ estimate of $3.93 billion.

Growth in its self-care and essential health units, through which it sells over-the-counter products including Benadryl, Band-Aid and Listerine, helped offset some weakness in skincare products.

On adjusted basis, the company reported a profit of 28 cents per share, compared with analysts’ estimate of 27 cents per share.

Kenvue said it expects annual net sales to grow closer to the lower end of its forecast of 1% to 3% growth.

The company reaffirmed its annual per share profit forecast of between $1.10 and $1.20. Analysts were expecting a profit of $1.14 per share.